Browsing by Author "Bruce, A.A.A."

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Capital Market Securities in Retrospect: A Shift into Properties
(University of Kelaniya, 2012) Bruce, A.A.A.
Securities investors in the 21st century seem to change the trend of investment for fear of the effects of the global financial crises and executive fraud scandals which account for the quick fall in the value of shares and other investment securities in the Nigerian Capital Market. Informed investors are of the view that the primary aim of their investment is to help create more wealth and advance their grip on corporate control; yet these have not been realistic because of these crises, hence the diversion from securities investment business to property ownerships. These have accosted most investors to resort to alternative investments, most especially in the properties such as land and buildings. This presentation substantiates the nature of regrets of most investors of securities and their sudden shift to investment properties and the effects such will have on the consolidation and growth of the Nigerian Capital Market. Structured questions were asked of 47 randomly selected investors in some selected Nigerian States: Lagos, Kaduna, Kano, Abuja, Jos, and Gombe. Data was empirically sourced from both primary and published materials which were analyzed via a chi-square test to obtain results. It was discovered that most capital market investors have begun to shift their investment priorities to properties such as land, buildings and other valuables which have a bearing on quick investment appreciation and returns. The author recommends that a complete shift from securities by investors may jeopardize the expected growth of the Nigerian Capital Market and investors may end up overstressing properties investment which may likely experience a similar trend in the stock market. Hence investors should only learn to diversify by spreading their investment on both securities and alternative investments.
IPO Stocks Performance Imperfection: A Review of Models and Empirical Works
(IPO Stocks Performance Imperfection: A Review of Models and Empirical Works, 2014) Bruce, A.A.A.; Thilakarathna, P.M.C.
Performance of IPO stocks is determined by the returns on a firm’s IPOs and other subsequent issues. Returns are derived from the price swings (volatility) as compared to the offer price so that a favourable swing indicates favourable returns and vice-versa. In the light of this, we review models and empirical works that try to explain these swings and their consequence on the IPOs performance to hypothesize that IPO stocks performance swing (return volatility) is inevitable as far as a real efficient market cannot exist except in a world of utopia. Evidences from the previous studies show that one reason or the other must be achieved or committed to get the IPO stocks marketed at the instance of the issue which subsequently keep influencing the same stocks even in the secondary market over a very long period of time even though at a minimum volatile rate but not completely eliminated. This is what we regard as stocks performance imperfection.
Is IPOs Trading Enhanced with the Advent of Automated Trading System? A Look at the Efficient Market Hypothesis
(International Journal of Business and Economics Research, 2014) Thilakarathna, P.M.C.; Bruce, A.A.A.
We examine and model the performance of Initial Public Offerings (IPOs) with the advent of the Automated Trading System (ATS) on the Efficient Market Hypothesis (EMH) of Fama (1970) and observe that the system of price determination and encoding such information to existing and potential investors for IPOs has significantly improved with related efficiency as most of the IPOs issued during the period after the introduction of the ATS have significantly attracted more investor demand and commendable pricing mechanism as a result of easy and quick access to information sharing. This could mean that information asymmetry has drastically reduced since they are electronically generated to produce the stock prices within a very limited period of time. But until now, prices of IPOs in most cases do not fully reflect available information as the EMH suggests and does not fulfil the Random Walk Hypothesis (Kendall, 1953, RWH) as a requirement for weak form of market efficiency. However, despite the ATS’s immense contributions, the rate of price swings and inability to fully reflect available information still remains an apparition to the market participants so that prices are either overpriced or underpriced. We use the stability, stationary, and normality diagnostic tests together with the EGARCH and TGARCH to define the trend of the prices. The result is not consistent with the Efficient Market Hypothesis of Fama (1970). Data on each IPO daily prices were obtained from the trading statistics of Colombo Stock Exchange (CSE) consisting of 231 IPO stocks traded between the years 2000 to 2012 consisting of 35,979 monthly observations; these prices are those of IPOs trading after the introduction of the ATS in 1997. The outcome clearly shows that the prices are not normally distributed and are significantly auto-correlated. This result does not support the RWH to satisfy for the weak market efficiency.
Volatility of early returns of Initial Public Offerings (IPOs) and the influence of corporate fraud
(University of Kelaniya, 2015) Bruce, A.A.A.